Correlation Between Yoshitsu and Natura Co

Can any of the company-specific risk be diversified away by investing in both Yoshitsu and Natura Co at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Yoshitsu and Natura Co into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Yoshitsu Co Ltd and Natura Co Holding, you can compare the effects of market volatilities on Yoshitsu and Natura Co and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Yoshitsu with a short position of Natura Co. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yoshitsu and Natura Co.

Diversification Opportunities for Yoshitsu and Natura Co

-0.91

Correlation Coefficient

Yoshitsu  Natura Co

Pay attention - limited upside

The 3 months correlation between Yoshitsu and Natura is -0.91. Overlapping area represents the amount of risk that can be diversified away by holding Yoshitsu Co Ltd and Natura Co Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Natura Co Holding and Yoshitsu is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Yoshitsu Co Ltd are associated (or correlated) with Natura Co. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Natura Co Holding has no effect on the direction of Yoshitsu i.e., Yoshitsu and Natura Co go up and down completely randomly.

Pair Corralation between Yoshitsu and Natura Co

If you would invest  752.00  in Natura Co Holding on September 17, 2024 and sell it today you would earn a total of  0.00  from holding Natura Co Holding or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	1.56%
Values	Daily Returns

Yoshitsu Co Ltd  vs.  Natura Co Holding

Yoshitsu

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Yoshitsu Co Ltd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's essential indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Natura Co Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Natura Co Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, Natura Co is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Yoshitsu and Natura Co

The main advantage of trading using opposite Yoshitsu and Natura Co positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yoshitsu position performs unexpectedly, Natura Co can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Natura Co will offset losses from the drop in Natura Co's long position.

The idea behind Yoshitsu Co Ltd and Natura Co Holding pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.